0000030167-19-000002.txt : 20190130 0000030167-19-000002.hdr.sgml : 20190130 20190130161249 ACCESSION NUMBER: 0000030167-19-000002 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20181130 FILED AS OF DATE: 20190130 DATE AS OF CHANGE: 20190130 EFFECTIVENESS DATE: 20190130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Dreyfus Sustainable U.S. Equity Fund, Inc. CENTRAL INDEX KEY: 0000030167 IRS NUMBER: 132691318 STATE OF INCORPORATION: MD FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02192 FILM NUMBER: 19552094 BUSINESS ADDRESS: STREET 1: THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2129226400 MAIL ADDRESS: STREET 1: C/O DREYFUS CORP STREET 2: 200 PARK AVENUE, 7TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS THIRD CENTURY FUND, INC DATE OF NAME CHANGE: 20161220 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS THIRD CENTURY FUND INC DATE OF NAME CHANGE: 20081201 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS PREMIER THIRD CENTURY FUND INC DATE OF NAME CHANGE: 20020517 0000030167 S000000095 The Dreyfus Sustainable U.S. Equity Fund, Inc. C000000149 Class A DTCAX C000000151 Class C DTCCX C000000152 Class I DRTCX C000000154 Class Z DRTHX C000174003 Class Y DTCYX N-CSRS 1 lp1035.htm FORM N-CSR lp1035.htm - Generated by SEC Publisher for SEC Filing

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number

811-02192

 

 

 

The Dreyfus Sustainable U.S. Equity Fund, Inc.

 

 

(Exact name of Registrant as specified in charter)

 

 

 

 

 

 

c/o The Dreyfus Corporation

200 Park Avenue

New York, New York  10166

 

 

(Address of principal executive offices)        (Zip code)

 

 

 

 

 

Bennett A. MacDougall, Esq.

200 Park Avenue

New York, New York  10166

 

 

(Name and address of agent for service)

 

 

Registrant's telephone number, including area code: 

(212) 922-6400

 

 

Date of fiscal year end:

 

05/31

 

Date of reporting period:

11/30/18

 

             

 

 

 

 


 

FORM N-CSR

Item 1.       Reports to Stockholders.

 


 

The Dreyfus Sustainable U.S. Equity Fund, Inc.

     

 

SEMIANNUAL REPORT

November 30, 2018

   
 

 

 

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.

 

The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.

 

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value

 

Contents

T H E F U N D

   

A Letter from the President of Dreyfus

2

Discussion of Fund Performance

3

Understanding Your Fund’s Expenses

5

                                    Comparing Your Fund’s Expenses

 

With Those of Other Funds

5

Statement of Investments

6

                                    Statement of Investments

 

in Affiliated Issuers

9

Statement of Assets and Liabilities

10

Statement of Operations

11

Statement of Changes in Net Assets

12

Financial Highlights

14

Notes to Financial Statements

19

                                    Information About the Renewal of

 

                                    the Fund’s Management and

 

Sub-Investment Advisory Agreements

29

F O R  M O R E  I N F O R M AT I O N

 

Back Cover

 

       
 


The Dreyfus Sustainable U.S. Equity Fund, Inc.

 

The Fund

A LETTER FROM THE PRESIDENT OF DREYFUS

Dear Shareholder:

We are pleased to present this semiannual report for The Dreyfus Sustainable U.S. Equity Fund, Inc., covering the six-month period from June 1, 2018 through November 30, 2018. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

Global growth trends diverged during the reporting period and markets experienced the return of volatility. While the U.S. economy continued to grow at above-trend rates and Japan rebounded briefly from a weak first quarter, the Eurozone economy began to moderate. Robust growth and strong corporate earnings continued to support U.S. stocks through much of the reporting period while stocks slipped in other developed markets. In emerging countries, markets remained under pressure as the currency crises in Turkey and Argentina led to concerns about contagion effects, adding to investors’ uneasiness.

Late in the reporting period, stocks generally sold off, in part because investors continued to be concerned about trade tensions and global growth. The sell-off partially offset U.S. gains while losses deepened in international markets. In addition, certain U.S. technology stocks, which had been enjoying a strong run, reported disappointing financial results.

Fixed income markets continued to struggle as U.S. interest rates rose; the yield on the benchmark 10-year Treasury bond breached 3.2% despite only moderate inflation. Growing investor concerns about global growth brought yields down toward the end of the reporting period.

We expect U.S. economic and earnings growth to persist over the near term, however we will continue to monitor economic data for any signs of a change in the outlook. As always, we encourage you to discuss the risks and opportunities in today’s investment environment with your financial advisor.

Thank you for your continued confidence and support.

Sincerely,

Renee Laroche-Morris
President
The Dreyfus Corporation

December 17, 2018

2

 

DISCUSSION OF FUND PERFORMANCE (Unaudited)

For the period from June 1, 2018 through November 30, 2018, as provided by portfolio managers Jeff Munroe and Raj Shant of Newton Investment Management (North America) Limited, Sub-Investment Adviser

Market and Fund Performance Overview

For the six-month period ended November 30, 2018, The Dreyfus Sustainable U.S. Equity Fund, Inc.’s Class A shares produced a total return of 5.58%, Class C shares returned 5.18%, Class I shares returned 5.62%, Class Y shares returned 5.63%, and Class Z shares returned 5.62%.1 In comparison, the fund’s benchmark, the S&P 500® Index (the “Index”), provided a total return of 3.02% for the same period.2

U.S. stocks gained ground over the reporting period amid rising corporate earnings, lower corporate tax rates, and strong economic conditions. The fund outperformed the Index mainly due to security selection in the information technology, health care, materials, and utilities sectors.

As of October 31, 2018, Raj Shant became a portfolio manager for the fund.

The Fund’s Investment Approach

The fund seeks long-term capital appreciation. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. companies that demonstrate attractive investment attributes with sustainable business practices and have no material unresolvable environmental, social, and governance (ESG) issues. The fund invests principally in common stocks.

The fund invests in the stocks of companies with any market capitalization, but focuses on companies with market capitalizations of $5 billion or more at the time of purchase. The fund may invest up to 20% of its assets in the stock of foreign companies, including up to 10% in stocks of companies in emerging market countries, that demonstrate attractive investment attributes and sustainable business practices and have no material unresolvable ESG issues.

Newton seeks attractively priced companies (determined using both quantitative and qualitative fundamental analysis) with good products, strong management and strategic direction that have adopted, or are making progress towards, a sustainable business approach. These are companies that Newton believes should benefit from favorable long-term trends. Newton uses an investment process that combines investment themes with fundamental research and analysis to select stocks for the fund’s portfolio.

Positive Economic Trends in the Face of Rising Volatility

The early part of the reporting period was one of sustained strength for U.S. equities. Markets trended higher and volatility was low. Gains were largely attributable to robust corporate earnings which benefited from the tailwind of last year’s fiscal stimulus and solid economic growth. These factors overwhelmed broader concerns pertaining to higher interest rates, inflation, and trade tensions. However, equity market strength proved unsustainable over the entire six months.

In late summer, continued political rhetoric in the U.S. regarding trade tariffs and midterm elections, along with political concerns over issues abroad in areas such as Italy, Turkey, Argentina, and the United Kingdom weighed on sentiment. Despite strong underlying fundamentals, volatility crept back into the picture in U.S. markets and upward progress was no longer smooth. In October, markets reversed and started to move lower. Continued worries over rising interest rates, trade disputes and falling commodity prices pressured equity markets throughout the rest of the period.

3

 

DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)

In this environment, large-cap stocks generally outperformed their mid- and small-cap counterparts. Style results were mixed across market cap sizes. The Index’s health care and consumer staples sectors fared well, while the energy and materials sectors trailed average S&P 500 sector performance during the period.

Security Selections Supported Fund Performance

Stock selection was strong across a host of sectors, particularly information technology, health care, materials and utilities. The fund has no holdings in the energy sector owing to our concerns about the carbon footprint and how these companies can transition to a low-carbon world. The underperformance of these companies contributed to relative performance. In health care, a position in drug manufacturer Merck & Co. helped returns as the share price rose steadily over the review period. Sales of Keytruda, its largest cancer drug, have continued to increase as the drug is approved for wider use. In addition, Abbott Laboratories’ stock rose as it announced sales and earnings above market consensus for the second quarter, raising its full-year guidance in the process. Lastly, not holding Facebook, a significant index constituent which we have avoided on concerns related to its management of social and privacy issues, proved particularly beneficial as the stock suffered a sharp fall owing to the company’s growth rate decelerating.

Stock picking in industrials curtailed outperformance, while an overweight to information technology also acted as a drag. Shares in General Electric fell sharply as third-quarter results missed expectations and its dividend was cut. The company continues to confront some challenges in its operations. Applied Materials was also a detractor owing to concerns over a cyclical slowdown. A position in eBay also weighed on returns during the period; eBay disappointed investors with its results for the second quarter.

A Cautious Investment Posture

A gently rising federal funds rate, a flattening yield curve, and the move from quantitative easing to quantitative tightening all contribute to the fact that financial conditions are much more challenging now than they were in 2017. While growth remains robust, trade policy does create a variety of risks to global supply chains. Thus, financial markets are returning to levels of volatility more consistent with long-term averages and we would expect that to continue over the coming year.

In such an environment, we remain focused on the individual characteristics of each business we invest in and continue to avoid excess balance-sheet leverage or models that rely on debt and credit to drive demand growth. We believe that the current portfolio is well positioned against an increasingly uncertain macroeconomic backdrop caused by a combination of rising rates, inflationary pressure and geopolitical risk.

December 17, 2018

1  Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charges imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s returns reflect the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in effect through September 30, 2019, at which time it may be extended, terminated, or modified. Had these expenses not been absorbed, the fund’s returns would have been lower.

2  Source: Lipper Inc. — The S&P 500® Index is widely regarded as the best single gauge of large-cap U.S. equities. The Index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. Investors cannot invest directly in any index.

Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

4

 

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in The Dreyfus Sustainable U.S. Equity Fund, Inc. from June 1, 2018 to November 30, 2018. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

                               

Expenses and Value of a $1,000 Investment

   

assuming actual returns for the six months ended November 30, 2018

 

 

 

 

Class A

Class C

Class I

Class Y

Class Z

Expenses paid per $1,000

 

$4.90

 

$8.74

 

$3.61

 

$3.61

 

$4.07

Ending value (after expenses)

 

$1,055.80

 

$1,051.80

 

$1,056.20

 

$1,056.30

 

$1,056.20

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS
(Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

                               

Expenses and Value of a $1,000 Investment

   

assuming a hypothetical 5% annualized return for the six months ended November 30, 2018

 

 

 

 

Class A

Class C

Class I

Class Y

Class Z

Expenses paid per $1,000

 

$4.81

 

$8.59

 

$3.55

 

$3.55

 

$4.00

Ending value (after expenses)

 

$1,020.31

 

$1,016.55

 

$1,021.56

 

$1,021.56

 

$1,021.11

 Expenses are equal to the fund’s annualized expense ratio of .95% for Class A, 1.70% for Class C, .70% for Class I, .70% for Class Y and .79% for Class Z, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

5

 

STATEMENT OF INVESTMENTS

November 30, 2018 (Unaudited)

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 99.5%

         

Banks - 6.2%

         

Citigroup

     

191,113

 

12,382,211

 

First Republic Bank

     

64,566

 

6,401,719

 
       

18,783,930

 

Capital Goods - 3.3%

         

Acuity Brands

     

28,469

 

3,701,539

 

Ferguson

     

47,964

 

3,083,228

 

General Electric

     

404,541

 

3,034,058

 
       

9,818,825

 

Consumer Durables & Apparel - 4.5%

         

Lennar, Cl. A

     

53,109

 

2,269,348

 

Newell Brands

     

90,445

 

2,116,413

 

NIKE, Cl. B

     

60,977

 

4,580,592

 

PulteGroup

     

62,360

 

1,653,787

 

Under Armour, Cl. A

     

124,302

a

2,968,332

 
       

13,588,472

 

Diversified Financials - 1.2%

         

Redwood Trust

     

222,063

b

3,706,232

 

Food & Staples Retailing - 3.9%

         

Costco Wholesale

     

23,127

 

5,348,813

 

Walgreens Boots Alliance

     

74,723

 

6,326,796

 
       

11,675,609

 

Food, Beverage & Tobacco - 2.6%

         

PepsiCo

     

64,155

 

7,823,061

 

Health Care Equipment & Services - 7.0%

         

Abbott Laboratories

     

144,391

 

10,692,154

 

Medtronic

     

106,174

 

10,355,150

 
       

21,047,304

 

Household & Personal Products - 3.7%

         

Colgate-Palmolive

     

154,384

 

9,806,472

 

Coty

     

170,096

 

1,418,601

 
       

11,225,073

 

Insurance - 5.0%

         

Intact Financial

     

130,414

 

10,440,776

 

Principal Financial Group

     

95,605

 

4,715,239

 
       

15,156,015

 

Materials - 6.1%

         

Albemarle

     

52,853

 

5,090,801

 

Ecolab

     

52,919

 

8,492,970

 

International Flavors & Fragrances

     

33,162

 

4,696,734

 
       

18,280,505

 

6

 

               
 

Description

     

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

         

Media & Entertainment - 4.8%

         

Alphabet, Cl. A

     

13,062

a

14,494,248

 

Pharmaceuticals Biotechnology & Life Sciences - 8.7%

         

Gilead Sciences

     

151,124

 

10,871,861

 

Merck & Co.

     

192,062

 

15,238,199

 
       

26,110,060

 

Retailing - 8.9%

         

Amazon.com

     

5,501

a

9,297,625

 

Dollar General

     

64,067

 

7,110,796

 

eBay

     

246,765

a

7,365,935

 

The TJX Companies

     

59,450

 

2,904,133

 
       

26,678,489

 

Semiconductors & Semiconductor Equipment - 3.9%

         

Applied Materials

     

162,100

 

6,043,088

 

NXP Semiconductors

     

31,401

 

2,617,901

 

Qualcomm

     

51,140

 

2,979,416

 
       

11,640,405

 

Software & Services - 10.8%

         

Accenture

     

64,006

 

10,530,267

 

Intuit

     

14,739

 

3,161,958

 

Microsoft

     

168,413

 

18,675,318

 
       

32,367,543

 

Technology Hardware & Equipment - 10.0%

         

Apple

     

79,683

 

14,229,790

 

Cisco Systems

     

252,894

 

12,106,036

 

Samsung SDI, GDR

     

79,665

c

3,668,948

 
       

30,004,774

 

Transportation - 2.1%

         

C.H. Robinson Worldwide

     

67,804

 

6,260,343

 

Utilities - 6.8%

         

CMS Energy

     

176,114

 

9,173,778

 

Eversource Energy

     

167,321

 

11,434,717

 
       

20,608,495

 

Total Common Stocks (cost $265,725,299)

     

299,269,383

 

7

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

               
 

Description

 

1-Day
Yield (%)

 

Shares

 

Value ($)

 

Investment Companies - .5%

         

Registered Investment Companies - .5%

         

Dreyfus Institutional Preferred Government Plus Money Market Fund
(cost $1,392,661)

 

2.23

 

1,392,661

d

1,392,661

 

Total Investments (cost $267,117,960)

 

100.0%

 

300,662,044

 

Liabilities, Less Cash and Receivables

 

.0%

 

(32,642)

 

Net Assets

 

100.0%

 

300,629,402

 

GDR—Global Depository Receipt

aNon-income producing security.
b Investment in real estate investment trust.
c Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2018, these securities were valued at $3,668,948 or 1.22% of net assets.
d Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.

   

Portfolio Summary (Unaudited)

Value (%)

Information Technology

24.6

Health Care

15.7

Consumer Discretionary

13.4

Financials

12.5

Consumer Staples

10.2

Utilities

6.9

Materials

6.1

Industrials

5.3

Communication Services

4.8

Investment Companies

.5

 

100.0

 Based on net assets.
See notes to financial statements.

8

 

STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)

             

Registered Investment Companies

Value
5/31/18($)

Purchases($)

Sales ($)

Value
11/30/18($)

Net
Assets(%)

Dividends/
Distributions($)

Dreyfus Institutional Preferred Government Plus Money Market Fund

2,234,544

23,059,621

23,901,504

1,392,661

.5

42,155

See notes to financial statements.

9

 

STATEMENT OF ASSETS AND LIABILITIES

November 30, 2018 (Unaudited)

             

 

 

 

 

 

 

 

 

 

 

Cost

 

Value

 

Assets ($):

 

 

 

 

Investments in securities—See Statement of Investments:

 

 

 

Unaffiliated issuers

265,725,299

 

299,269,383

 

Affiliated issuers

 

1,392,661

 

1,392,661

 

Dividends receivable

 

344,258

 

Receivable for shares of Common Stock subscribed

 

38,749

 

Prepaid expenses

 

 

 

 

48,547

 

 

 

 

 

 

301,093,598

 

Liabilities ($):

 

 

 

 

Due to The Dreyfus Corporation and affiliates—Note 3(c)

 

 

 

189,467

 

Payable for shares of Common Stock redeemed

 

89,420

 

Directors fees and expenses payable

 

81,220

 

Unrealized depreciation on foreign currency transactions

 

697

 

Accrued expenses

 

 

 

 

103,392

 

 

 

 

 

 

464,196

 

Net Assets ($)

 

 

300,629,402

 

Composition of Net Assets ($):

 

 

 

 

Paid-in capital

 

 

 

 

244,397,026

 

Total distributable earnings (loss)

 

 

 

 

56,232,376

 

Net Assets ($)

 

 

300,629,402

 

 

             

Net Asset Value Per Share

Class A

Class C

Class I

Class Y

Class Z

 

Net Assets ($)

21,915,382

3,183,055

10,708,065

216,614

264,606,286

 

Shares Outstanding

1,897,961

326,963

903,804

18,312

22,354,953

 

Net Asset Value Per Share ($)

11.55

9.74

11.85

11.83

11.84

 

             

See notes to financial statements.

           

10

 

STATEMENT OF OPERATIONS

Six Months Ended November 30, 2018 (Unaudited)

             
             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income ($):

 

 

 

 

Income:

 

 

 

 

Cash dividends (net of $10,544 foreign taxes withheld at source):

 

Unaffiliated issuers

 

 

3,076,381

 

Affiliated issuers

 

 

42,155

 

Total Income

 

 

3,118,536

 

Expenses:

 

 

 

 

Management fee—Note 3(a)

 

 

924,004

 

Shareholder servicing costs—Note 3(c)

 

 

228,668

 

Registration fees

 

 

39,886

 

Directors’ fees and expenses—Note 3(d)

 

 

36,166

 

Professional fees

 

 

31,526

 

Distribution fees—Note 3(b)

 

 

12,697

 

Prospectus and shareholders’ reports

 

 

10,906

 

Loan commitment fees—Note 2

 

 

3,761

 

Custodian fees—Note 3(c)

 

 

3,285

 

Miscellaneous

 

 

48,931

 

Total Expenses

 

 

1,339,830

 

Less—reduction in expenses due to undertaking—Note 3(a)

 

 

(95,647)

 

Net Expenses

 

 

1,244,183

 

Investment Income—Net

 

 

1,874,353

 

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):

 

 

Net realized gain (loss) on investments and foreign currency transactions

10,583,795

 

Net realized gain (loss) on forward foreign currency exchange contracts

21,491

 

Net Realized Gain (Loss)

 

 

10,605,286

 

Net unrealized appreciation (depreciation) on investments
and foreign currency transactions

 

 

4,019,869

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

14,625,155

 

Net Increase in Net Assets Resulting from Operations

 

16,499,508

 

             

See notes to financial statements.

         

11

 

STATEMENT OF CHANGES IN NET ASSETS

                   
                   

 

 

 

 

Six Months Ended
November 30, 2018 (Unaudited)

 

Year Ended
May 31, 2018

a

Operations ($):

 

 

 

 

 

 

 

 

Investment income—net

 

 

1,874,353

 

 

 

2,589,032

 

Net realized gain (loss) on investments

 

10,605,286

 

 

 

7,670,612

 

Net unrealized appreciation (depreciation)
on investments

 

4,019,869

 

 

 

6,177,623

 

Net Increase (Decrease) in Net Assets
Resulting from Operations

16,499,508

 

 

 

16,437,267

 

Distributions ($):

 

Distributions to shareholders:

 

 

 

 

 

 

 

 

Class A

 

 

-

 

 

 

(4,478,176)

 

Class C

 

 

-

 

 

 

(1,182,859)

 

Class I

 

 

-

 

 

 

(2,506,527)

 

Class Y

 

 

-

 

 

 

(26,005)

 

Class Z

 

 

-

 

 

 

(59,564,430)

 

Total Distributions

 

 

-

 

 

 

(67,757,997)

 

Capital Stock Transactions ($):

 

Net proceeds from shares sold:

 

 

 

 

 

 

 

 

Class A

 

 

1,756,525

 

 

 

3,979,593

 

Class C

 

 

98,391

 

 

 

774,021

 

Class I

 

 

2,202,893

 

 

 

5,122,053

 

Class Y

 

 

31,440

 

 

 

378,365

 

Class Z

 

 

566,085

 

 

 

2,783,050

 

Distributions reinvested:

 

 

 

 

 

 

 

 

Class A

 

 

-

 

 

 

4,141,985

 

Class C

 

 

-

 

 

 

975,026

 

Class I

 

 

-

 

 

 

1,247,130

 

Class Y

 

 

-

 

 

 

1,548

 

Class Z

 

 

-

 

 

 

57,038,562

 

Cost of shares redeemed:

 

 

 

 

 

 

 

 

Class A

 

 

(1,768,134)

 

 

 

(3,607,486)

 

Class C

 

 

(565,707)

 

 

 

(2,228,089)

 

Class I

 

 

(2,758,129)

 

 

 

(7,027,954)

 

Class Y

 

 

(88,435)

 

 

 

(103,278)

 

Class Z

 

 

(14,035,594)

 

 

 

(27,380,437)

 

Increase (Decrease) in Net Assets
from Capital Stock Transactions

(14,560,665)

 

 

 

36,094,089

 

Total Increase (Decrease) in Net Assets

1,938,843

 

 

 

(15,226,641)

 

Net Assets ($):

 

Beginning of Period

 

 

298,690,559

 

 

 

313,917,200

 

End of Period

 

 

300,629,402

 

 

 

298,690,559

 

12

 

                   
                   

 

 

 

 

Six Months Ended
November 30, 2018 (Unaudited)

 

Year Ended
May 31, 2018

a

Capital Share Transactions (Shares):

 

Class Ab

 

 

 

 

 

 

 

 

Shares sold

 

 

151,991

 

 

 

338,032

 

Shares issued for distributions reinvested

 

 

-

 

 

 

377,228

 

Shares redeemed

 

 

(155,666)

 

 

 

(307,052)

 

Net Increase (Decrease) in Shares Outstanding

(3,675)

 

 

 

408,208

 

Class Cb,c

 

 

 

 

 

 

 

 

Shares sold

 

 

9,929

 

 

 

73,564

 

Shares issued for distributions reinvested

 

 

-

 

 

 

104,504

 

Shares redeemed

 

 

(58,815)

 

 

 

(223,781)

 

Net Increase (Decrease) in Shares Outstanding

(48,886)

 

 

 

(45,713)

 

Class I

 

 

 

 

 

 

 

 

Shares sold

 

 

184,470

 

 

 

423,647

 

Shares issued for distributions reinvested

 

 

-

 

 

 

110,954

 

Shares redeemed

 

 

(235,556)

 

 

 

(552,303)

 

Net Increase (Decrease) in Shares Outstanding

(51,086)

 

 

 

(17,702)

 

Class Y

 

 

 

 

 

 

 

 

Shares sold

 

 

2,627

 

 

 

31,229

 

Shares issued for distributions reinvested

 

 

-

 

 

 

138

 

Shares redeemed

 

 

(7,173)

 

 

 

(9,296)

 

Net Increase (Decrease) in Shares Outstanding

(4,546)

 

 

 

22,071

 

Class Zc

 

 

 

 

 

 

 

 

Shares sold

 

 

47,382

 

 

 

226,989

 

Shares issued for distributions reinvested

 

 

-

 

 

 

5,074,574

 

Shares redeemed

 

 

(1,184,253)

 

 

 

(2,212,724)

 

Net Increase (Decrease) in Shares Outstanding

(1,136,871)

 

 

 

3,088,839

 

                   

aDistributions to shareholders include $155,236 Class A, $121,396 Class I, $1,273 Class Y and $2,641,605 Class Z distributions from net investment income and $4,322,940 Class A, $1,182,859 Class C, $2,385,131 Class I, $24,732 Class Y and $56,922,825 Class Z distributions from net realized gains. Undistributed investment income—net was $2,613,228 in 2018 and is no longer presented as a result of the adoption of SEC’s Disclosure Update and Simplification Rule.

 

bDuring the period ended November 30, 2018, 1,353 Class C shares representing $12,846 were automatically converted to 1,144 Class A shares and during the period ended May 31, 2018, 20,530 Class C shares representing $195,009 were automatically converted to 17,445 Class A shares.

 

cDuring the period ended November 30, 2018, 1,253 Class Z shares representing $15,380 were exchanged for 1,285 Class A shares and during the period ended May 31, 2018, 481 Class C shares representing $4,448 were exchanged for 397 Class Z shares.

 

See notes to financial statements.

               

13

 

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.

               
     
 

Six Months Ended

 

Class A Shares

November 30, 2018

Year Ended May 31,

(Unaudited)

2018

2017

2016

2015

2014

Per Share Data ($):

           

Net asset value, beginning of period

10.94

13.26

12.02

14.38

14.82

12.76

Investment Operations:

           

Investment income—neta

.06

.08

.09

.11

.09

.10

Net realized and unrealized
gain (loss) on investments

.55

.60

1.80

(.69)

1.33

2.45

Total from Investment Operations

.61

.68

1.89

(.58)

1.42

2.55

Distributions:

           

Dividends from
investment income—net

-

(.10)

(.11)

(.09)

(.10)

(.14)

Dividends from net realized
gain on investments

-

(2.90)

(.54)

(1.69)

(1.76)

(.35)

Total Distributions

-

(3.00)

(.65)

(1.78)

(1.86)

(.49)

Net asset value, end of period

11.55

10.94

13.26

12.02

14.38

14.82

Total Return (%)b

5.58c

5.05

16.25

(3.86)

9.81

20.37

Ratios/Supplemental Data (%):

           

Ratio of total expenses
to average net assets

1.13d

1.11

1.26

1.23

1.20

1.22

Ratio of net expenses
to average net assets

.95d

.95

1.26

1.23

1.20

1.22

Ratio of net investment income
to average net assets

1.06d

.67

.76

.86

.62

.70

Portfolio Turnover Rate

28.41c

49.82

130.14

61.45

57.09

34.37

Net Assets, end of period ($ x 1,000)

21,915

20,812

19,810

19,733

23,248

24,320

a       Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
b Annualized.
See notes to financial statements.

14

 

               
     
 

Six Months Ended

 

Class C Shares

November 30, 2018

Year Ended May 31,

(Unaudited)

2018

2017

2016

2015

2014

Per Share Data ($):

           

Net asset value, beginning of period

9.26

11.64

10.63

12.93

13.52

11.72

Investment Operations:

           

Investment income (loss)—neta

.02

(.01)

(.00)b

.01

(.02)

(.01)

Net realized and unrealized
gain (loss) on investments

.46

.53

1.58

(.61)

1.21

2.23

Total from Investment Operations

.48

.52

1.58

(.60)

1.19

2.22

Distributions:

           

Dividends from
investment income—net

-

-

(.03)

(.01)

(.02)

(.07)

Dividends from net realized
gain on investments

-

(2.90)

(.54)

(1.69)

(1.76)

(.35)

Total Distributions

-

(2.90)

(.57)

(1.70)

(1.78)

(.42)

Net asset value, end of period

9.74

9.26

11.64

10.63

12.93

13.52

Total Return (%)c

5.18d

4.25

15.34

(4.48)

9.00

19.33

Ratios/Supplemental Data (%):

           

Ratio of total expenses
to average net assets

1.90e

1.86

2.02

1.98

1.96

1.99

Ratio of net expenses
to average net assets

1.70e

1.70

2.01

1.98

1.96

1.99

Ratio of net investment income (loss)
to average net assets

.33e

(.08)

(.01)

.11

(.11)

(.07)

Portfolio Turnover Rate

28.41d

49.82

130.14

61.45

57.09

34.37

Net Assets, end of period ($ x 1,000)

3,183

3,481

4,907

6,017

6,698

5,800

a      Based on average shares outstanding.
b Amount represents less than $.01 per share.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
See notes to financial statements.

15

 

FINANCIAL HIGHLIGHTS (continued)

               
     
 

Six Months Ended

 

Class I Shares

November 30, 2018

Year Ended May 31,

(Unaudited)

2018

2017

2016

2015

2014

Per Share Data ($):

           

Net asset value, beginning of period

11.22

13.53

12.25

14.63

15.04

12.95

Investment Operations:

           

Investment income—neta

.08

.12

.14

.15

.14

.14

Net realized and unrealized
gain (loss) on investments

.55

.62

1.83

(.70)

1.36

2.48

Total from Investment Operations

.63

.74

1.97

(.55)

1.50

2.62

Distributions:

           

Dividends from
investment income—net

-

(.15)

(.15)

(.14)

(.15)

(.18)

Dividends from net realized
gain on investments

-

(2.90)

(.54)

(1.69)

(1.76)

(.35)

Total Distributions

-

(3.05)

(.69)

(1.83)

(1.91)

(.53)

Net asset value, end of period

11.85

11.22

13.53

12.25

14.63

15.04

Total Return (%)

5.62b

5.38

16.65

(3.55)

10.18

20.65

Ratios/Supplemental Data (%):

           

Ratio of total expenses
to average net assets

.83c

.81

.95

.91

.90

.91

Ratio of net expenses
to average net assets

.70c

.70

.93

.91

.90

.91

Ratio of net investment income
to average net assets

1.32c

.91

1.10

1.17

.96

1.01

Portfolio Turnover Rate

28.41b

49.82

130.14

61.45

57.09

34.37

Net Assets, end of period ($ x 1,000)

10,708

10,710

13,162

10,150

12,499

8,629

a       Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.

16

 

                 
     
 

Six Months Ended

   

Class Y Shares

November 30, 2018

 

Year Ended May 31,

(Unaudited)

     

2018

2017a

Per Share Data ($):

           

Net asset value, beginning of period

11.20

     

13.52

12.70

Investment Operations:

           

Investment income—netb

.08

     

.12

.10

Net realized and unrealized
gain (loss) on investments

.55

     

.61

1.42

Total from Investment Operations

.63

     

.73

1.52

Distributions:

           

Dividends from
investment income—net

-

     

(.15)

(.16)

Dividends from net realized
gain on investments

-

     

(2.90)

(.54)

Total Distributions

-

     

(3.05)

(.70)

Net asset value, end of period

11.83

     

11.20

13.52

Total Return (%)

5.63c

     

5.33

12.48c

Ratios/Supplemental Data (%):

           

Ratio of total expenses
to average net assets

.78d

     

.77

.96d

Ratio of net expenses
to average net assets

.70d

     

.70

.94d

Ratio of net investment income
to average net assets

1.35d

     

1.01

1.13d

Portfolio Turnover Rate

28.41c

     

49.82

130.14

Net Assets, end of period ($ x 1,000)

217

     

256

11

a       From September 30, 2016 (commencement of initial offering) to May 31, 2017.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.

17

 

FINANCIAL HIGHLIGHTS (continued)

               
     
 

Six Months Ended

 

Class Z Shares

November 30, 2018

Year Ended May 31,

(Unaudited)

2018

2017

2016

2015

2014

Per Share Data ($):

           

Net asset value, beginning of period

11.21

13.53

12.25

14.62

15.03

12.94

Investment Operations:

           

Investment income—neta

.07

.11

.13

.14

.13

.13

Net realized and unrealized
gain (loss) on investments

.56

.60

1.83

(.69)

1.35

2.47

Total from Investment Operations

.63

.71

1.96

(.55)

1.48

2.60

Distributions:

           

Dividends from
investment income—net

-

(.13)

(.14)

(.13)

(.13)

(.16)

Dividends from net realized
gain on investments

-

(2.90)

(.54)

(1.69)

(1.76)

(.35)

Total Distributions

-

(3.03)

(.68)

(1.82)

(1.89)

(.51)

Net asset value, end of period

11.84

11.21

13.53

12.25

14.62

15.03

Total Return (%)

5.62b

5.19

16.51

(3.57)

10.06

20.50

Ratios/Supplemental Data (%):

           

Ratio of total expenses
to average net assets

.84c

.87

1.03

1.03

.98

1.01

Ratio of net expenses
to average net assets

.79c

.77

1.02

1.03

.98

1.01

Ratio of net investment income
to average net assets

1.23c

.85

.99

1.05

.86

.91

Portfolio Turnover Rate

28.41b

49.82

130.14

61.45

57.09

34.37

Net Assets,
end of period ($ x 1,000)

264,606

263,433

276,028

260,967

291,371

283,351

a      Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.

18

 

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

The Dreyfus Sustainable U.S. Equity Fund, Inc. (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company. The fund’s investment objective is to seek long-term capital appreciation. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Newton Investment Management (North America) Limited (“Newton”), a wholly-owned subsidiary of BNY Mellon and an affiliate of Dreyfus, serves as the fund’s sub-investment adviser.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund’s shares. The fund is authorized to issue 700 million shares of $.001 par value Common Stock. The fund currently has authorized six classes of shares: Class A (100 million shares authorized), Class C (100 million shares authorized), Class I (100 million shares authorized), Class T (100 million shares authorized), Class Y (100 million shares authorized) and Class Z (200 million shares authorized). Class A and Class T shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares ten years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Class Z shares are sold at net asset value per share to certain shareholders of the fund. Class Z shares generally are not available for new accounts. As of the date of this report, the fund did not offer Class T shares for purchase. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC

19

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.

The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which

20

 

market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.

Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the fund’s Board of Directors (the “Board”). Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.

Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.

The following is a summary of the inputs used as of November 30, 2018 in valuing the fund’s investments:

21

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

         
 

Level 1 - Unadjusted Quoted Prices

Level 2 - Other Significant Observable Inputs

Level 3 -Significant Unobservable Inputs

Total

Assets ($)

     

Investments in Securities:

     

Equity Securities - Common Stocks

285,745,379

13,524,004††

-

299,269,383

Investment Company

1,392,661

-

-

1,392,661

 See Statement of Investments for additional detailed categorizations.
†† Securities classified within Level 2 at period end as the values were determined pursuant to the fund’s fair valuation procedures.

At November 30, 2018, the amount of securities transferred between levels equals fair value of exchange traded foreign equity securities reported as Level 2 in the table above. At May 31, 2018, $20,402,254 of exchange traded foreign equity securities were classified within Level 2 of the fair value hierarchy pursuant to the fund’s fair valuation procedures. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.

(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.

(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

22

 

(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are considered “affiliated” under the Act.

(e) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended November 30, 2018, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended November 30, 2018, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended May 31, 2018 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The tax character of distributions paid to shareholders during the fiscal year ended May 31, 2018 was as follows: ordinary income $17,559,404 and long-term capital gains $50,198,593. The tax character of current year distributions will be determined at the end of the current fiscal year.

(g) New Accounting Pronouncements: In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The update provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 will be effective for annual periods beginning after December 15, 2019. Management is currently assessing the potential impact of these changes to future financial statements.

23

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed long-term open-end funds in an $1.030 billion unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $830 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is in amount equal to $200 million and is available only to the Dreyfus Floating Rate Income Fund, a series of The Dreyfus/Laurel Funds, Inc. Prior to October 3, 2018, the unsecured credit facility with Citibank, N.A. was $830 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended November 30, 2018, the fund did not borrow under the Facilities.

NOTE 3—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to the management agreement (the “Agreement”) with Dreyfus, the management fee is computed at an annual rate of .60% of the value of the fund’s average daily net assets and is payable monthly. Pursuant to the Agreement, if in any full fiscal year the aggregate expenses allocable to Class Z shares (excluding taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed 1½% of the value of the average daily net assets of Class Z shares, the fund may deduct from the fees paid to Dreyfus, or Dreyfus will bear such excess expense. During the period ended November 30, 2018, there was no expense reimbursement pursuant to the Agreement.

Dreyfus has contractually agreed, from June 1, 2018 through September 30, 2019, to waive receipt of its fees and/or assume the direct expenses of the fund so that the expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commission, commitment fees on borrowings and extraordinary expenses) exceed .70% of the value of the fund’s average daily net assets. The reduction in expenses, pursuant to the undertaking, amounted to $95,647 during the period ended November 30, 2018.

24

 

Pursuant to the separate sub-investment advisory agreement between Dreyfus and Newton, Newton serves as the fund’s sub-investment adviser responsible for the day-to-day management of the fund’s portfolio. Dreyfus pays Newton a monthly fee at an annual percentage of the value of the fund’s average daily net assets. Dreyfus has obtained an exemptive order from the SEC (the “Order”), upon which the fund may rely, to use a manager of managers approach that permits Dreyfus, subject to certain conditions and approval by the Board, to enter into and materially amend sub-investment advisory agreements with one or more sub-investment advisers who are either unaffiliated with Dreyfus or are wholly-owned subsidiaries (as defined under the Act) of Dreyfus’ ultimate parent company, BNY Mellon, without obtaining shareholder approval. The Order also allows the fund to disclose the sub-investment advisory fee paid by Dreyfus to any unaffiliated sub-investment adviser in the aggregate with other unaffiliated sub-investment advisers in documents filed with the SEC and provided to shareholders. In addition, pursuant to the Order, it is not necessary to disclose the sub-investment advisory fee payable by Dreyfus separately to a sub-investment adviser that is a wholly-owned subsidiary of BNY Mellon in documents filed with the SEC and provided to shareholders; such fees are to be aggregated with fees payable to Dreyfus. Dreyfus has ultimate responsibility (subject to oversight by the Board) to supervise any sub-investment adviser and recommend the hiring, termination, and replacement of any sub-investment adviser to the Board.

During the period ended November 30, 2018, the Distributor retained $5,724 from commissions earned on sales of the fund’s Class A and $101 from CDSC fees on redemptions of the fund’s Class C shares.

(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended November 30, 2018, Class C shares were charged $12,697 pursuant to the Distribution Plan.

(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended

25

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

November 30, 2018, Class A and Class C shares were charged $27,863 and $4,233, respectively, pursuant to the Shareholder Services Plan.

Under the Shareholder Services Plan, Class Z shares reimburse the Distributor at an amount not to exceed an annual rate of .25% of the value of Class Z shares’ average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class Z shares and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended November 30, 2018, Class Z shares were charged $121,487 pursuant to the Shareholder Services Plan.

The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits, if any, as an expense offset in the Statement of Operations.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended November 30, 2018, the fund was charged $42,761 for transfer agency services. These fees are included in Shareholder servicing costs in the Statement of Operations.

The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended November 30, 2018, the fund was charged $3,285 pursuant to the custody agreement.

During the period ended November 30, 2018, the fund was charged $6,289 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $148,505, Distribution Plan fees $1,996, Shareholder Services Plan fees $25,516, custodian fees $5,400, Chief Compliance Officer fees $5,241 and transfer agency fees $19,827, which are offset against an expense reimbursement currently in effect in the amount of $17,018.

26

 

(d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended November 30, 2018, amounted to $86,081,302 and $98,161,894, respectively.

Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its OTC derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.

Each type of derivative instrument that was held by the fund during the period ended November 30, 2018 is discussed below.

Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements,

27

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. At November 30, 2018, there were no outstanding forward contracts.

The following summarizes the average market value of derivatives outstanding during the period ended November 30, 2018:

     

 

 

Average Market Value ($)

Forward contracts

 

36,639

     

At November 30, 2018, accumulated net unrealized appreciation on investments was $33,544,084, consisting of $48,202,107 gross unrealized appreciation and $14,658,023 gross unrealized depreciation.

At November 30, 2018, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

28

 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AND SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited)

At a meeting of the fund’s Board of Directors held on July 18-19, 2018, the Board considered the renewal of the fund’s Management Agreement, pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”), and the Sub-Investment Advisory Agreement (together, the “Agreements”), pursuant to which Newton Investment Management (North America) Limited (the “Subadviser”) provides day-to-day management of the fund’s investments. The Board members, a majority of whom are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of Dreyfus and the Subadviser. In considering the renewal of the Agreements, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.

Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus’ corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.

The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus’ extensive administrative, accounting and compliance infrastructures, as well as Dreyfus’ supervisory activities over the Subadviser. The Board also considered portfolio management’s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution.

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (“Performance Group 1”) and with a broader group of funds (“Performance Universe 1”), all for various periods ended May 31, 2018; (2) at the request of Dreyfus, the fund’s performance with the performance of a group of environmental, social and governance (“ESG”)-rated funds from various Lipper

29

 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AND SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited) (continued)

categories (“Performance Group 2”) and with a broader group of ESG-rated funds (“Performance Universe 2”), all for various periods ended May 31, 2018; and (3) the fund’s actual and contractual management fees and total expenses with those of groups of comparable funds identical to Performance Group 1 (“Expense Group 1”) and Performance Group 2 (“Expense Group 2”) and with broader groups of funds that included the Performance Group 1 funds (“Expense Universe 1”) and the Performance Group 2 funds (“Expense Universe 2”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Broadridge used to select the Performance Groups and Performance Universes and the Expense Groups and Expense Universes.

Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds. The Board discussed with representatives of Dreyfus, its affiliates and/or the Subadviser the results of the comparisons and considered that the fund’s total return performance was below the medians of Performance Groups 1 and 2 and Performance Universes 1 and 2 medians for all periods. The Board considered the relative proximity of the fund’s performance to the medians of the Performance Groups and Performance Universes in certain periods. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index, and it was considered that the fund’s returns were above the returns of the index in three of the ten calendar years shown. The Board also considered that the fund’s investment strategies and portfolio management changed (including the addition of the Subadviser) in May 2017.

The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. The Board considered that the fund’s contractual management fee was below the Expense Group 1 and 2 medians, the fund’s actual management fee was below the Expense Group 1 and 2 medians (lowest in both Expense Groups) and below the Expense Universe 1 and 2 medians and the fund’s total expenses were below the Expense Group 1 and 2 medians (lowest in Expense Group 1) and the Expense Universe 1 and 2 medians.

Dreyfus representatives stated that Dreyfus has contractually agreed, until October 1, 2019, to waive receipt of its fees and/or assume the direct expenses of the fund so that the direct expenses of none of its classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .70% of average daily net assets.

Dreyfus representatives reviewed with the Board the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund and (2) paid to Dreyfus or the Subadviser or its affiliates for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients. They discussed differences in

30

 

fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors. The Board considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness of the fund’s management fee. The Board considered the fee paid to the Subadviser in relation to the fee paid to Dreyfus by the fund and the respective services provided by the Subadviser and Dreyfus. The Board also took into consideration that the Subadviser’s fee is paid by Dreyfus (out of its fee from the fund) and not the fund.

Analysis of Profitability and Economies of Scale. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to Dreyfus and its affiliates for managing the funds in the Dreyfus fund complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus. The Board also considered the expense limitation arrangement and its effect on the profitability of Dreyfus and its affiliates. The Board also had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.

The Board considered on the advice of its counsel the profitability analysis (1) as part of its evaluation of whether the fees under the Agreements, considered in relation to the mix of services provided by Dreyfus and the Subadviser, including the nature, extent and quality of such services, supported the renewal of the Agreements and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Since Dreyfus, and not the fund, pays the Subadviser pursuant to the Sub-Investment Advisory Agreement, the Board did not consider the Subadviser’s profitability to be relevant to its deliberations. Dreyfus representatives stated that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that Dreyfus may have realized any economies of scale would be less. Dreyfus representatives also stated that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to Dreyfus and the Subadviser from acting as investment adviser and sub-investment adviser, respectively, and took into consideration the soft dollar arrangements in effect for trading the fund’s investments.

At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the

31

 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AND SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited) (continued)

renewal of the Agreements. Based on the discussions and considerations as described above, the Board concluded and determined as follows.

· The Board concluded that the nature, extent and quality of the services provided by Dreyfus and the Subadviser are adequate and appropriate.

· The Board agreed to closely monitor performance and determined to approve renewal of the Agreements only until the first quarter 2019 regular Board meeting.

· The Board concluded that the fees paid to Dreyfus and the Subadviser continued to be appropriate under the circumstances and in light of the factors and the totality of the services provided as discussed above, subject to review no later than the next renewal consideration.

· The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

In evaluating the Agreements, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with Dreyfus and its affiliates and the Subadviser, of Dreyfus and the Subadviser and the services provided to the fund by Dreyfus and the Subadviser. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreements, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of the Agreements for the fund, or substantially similar agreements for other Dreyfus funds that the Board oversees, during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the fund’s arrangements, or substantially similar arrangements for other Dreyfus funds that the Board oversees, in prior years. The Board determined to renew the Agreements through the first quarter 2019 regular Board meeting.

32

 

NOTES

33

 

For More Information

The Dreyfus Sustainable U.S. Equity Fund, Inc.

200 Park Avenue
New York, NY 10166

Manager

The Dreyfus Corporation
200 Park Avenue
New York, NY 10166

Sub-Investment Adviser

Newton Investment Management
(North America) Limited
160 Queen Victoria Street
London, EC4V, 4LA, UK

Custodian

The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286

Transfer Agent &
Dividend Disbursing Agent

Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166

Distributor

MBSC Securities Corporation
200 Park Avenue
New York, NY 10166

   

Ticker Symbols:   Class A: DTCAX Class C: DTCCX Class I: DRTCX Class Y: DTCYX Class Z: DRTHX

Telephone Call your financial representative or 1-800-DREYFUS

Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144

E-mail Send your request to info@dreyfus.com

Internet Information can be viewed online or downloaded at www.dreyfus.com

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov.

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.

     


Printed on recycled paper.
50% post-consumer.
Process chlorine free.
Vegetable-based ink.

 

© 2019 MBSC Securities Corporation
0035SA1118

 


 

 

Item 2.       Code of Ethics.

                  Not applicable.

Item 3.       Audit Committee Financial Expert.

                  Not applicable.

Item 4.       Principal Accountant Fees and Services.

                  Not applicable.

Item 5.       Audit Committee of Listed Registrants.

                  Not applicable.

Item 6.       Investments.

(a)              Not applicable.

Item 7.       Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

                  Not applicable.

Item 8.       Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9.       Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

                  Not applicable.

Item 10.     Submission of Matters to a Vote of Security Holders.

                  There have been no material changes to the procedures applicable to Item 10.

Item 11.     Controls and Procedures.

(a)        The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.


 

(b)        There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12.           Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable. 

Item 13.     Exhibits.

(a)(1)    Not applicable.

(a)(2)    Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3)    Not applicable.

(b)        Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

The Dreyfus Sustainable U.S. Equity Fund, Inc.

By:       /s/ Bradley J. Skapyak

            Bradley J. Skapyak

            President

 

Date:    January 29, 2019

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

By:       /s/ Bradley J. Skapyak

            Bradley J. Skapyak

            President

 

Date:    January 29, 2019

 

 

By:       /s/ James Windels

            James Windels

            Treasurer

 

Date:    January 25, 2019

 

 

 


 

EXHIBIT INDEX

(a)(2)    Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.  (EX-99.CERT)

(b)        Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.  (EX-99.906CERT)

EX-99.CERT 2 exhibit302-035.htm CERTIFICATION REQUIRED BY RULE 30A-2 exhibit302-035.htm - Generated by SEC Publisher for SEC Filing

[EX-99.CERT]—Exhibit  (a)(2)

SECTION 302 CERTIFICATION

 

I, Bradley J. Skapyak, certify that:

1.  I have reviewed this report on Form N-CSR of The Dreyfus Sustainable U.S. Equity Fund, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.  The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

                                                                        By:       /s/ Bradley J. Skapyak

                                                                                    Bradley J. Skapyak

                                                                                    President

                                                                        Date:    January 29, 2019


 

SECTION 302 CERTIFICATION

I, James Windels, certify that:

1.  I have reviewed this report on Form N-CSR of The Dreyfus Sustainable U.S. Equity Fund, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.  The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

                                                                        By:       /s/ James Windels

                                                                                    James Windels

                                                                                    Treasurer

                                                                        Date:    January 25, 2019

 

EX-99.906 CERT 3 exhibit906-035.htm CERTIFICATION REQUIRED BY SECTION 906 exhibit906-035.htm - Generated by SEC Publisher for SEC Filing

[EX-99.906CERT]

Exhibit (b)

 

 

SECTION 906 CERTIFICATIONS

            In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

            (1)        the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

 

            (2)        the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

                                                                        By:       /s/ Bradley J. Skapyak

                                                                                    Bradley J. Skapyak

                                                                                    President

                                                                        Date:    January 29, 2019

 

 

                                                                        By:       /s/ James Windels

                                                                                    James Windels

                                                                                    Treasurer

 

                                                                        Date:    January 25, 2019

 

 

This certificate is furnished pursuant to the requirements of Form N-CSR and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

 

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